Title insurance offers protection from several risks that can arise in a real estate transaction. These risks can cause problems throughout the closing process for the buyer and their lender and include clerical errors, forgery or fraud, incapacity, lack of legal access, missing links in the chain of title, unknown heirs due to succession, surveyor errors, and more. Title insurance protects you and your lender’s investment in the property, even after closing. It is a one-time fee that can be included in your closing costs and helps to cover legal costs in the event of a challenge to your title.

There are two types of title insurance policies. Lender’s title insurance will be required in most transactions, which protects your lender and their company up to the amount of the loan. Once the loan is paid off, the lender’s policy will terminate. Owner’s title insurance protects the buyer/new owner against title defects described above for as long as they own the property. This type of policy can be purchased at the same time as your lender’s policy, which can also save you money. These policies help to defend you and your lender against unexpected legal challenges that can threaten your ownership.